I received the following by email — it is from Keith Redmond’s Facebook page (I still do not do Facebook so could not otherwise access). This story deserves its own post here. How many other Canadians who were border babies will one day sooner or later have their own OMG moments? There was a push to inform them in correspondence to mayors and a CBC broadcast. We wanted them to know of this site but that effort seems to not have connected with too many born across the border as long ago that is where the nearest hospitals were.
A truly heartbreaking story of a Canadian Accidental American…..
XXXXX to Accidental Americans
I just received the following heartbreaking story from a Canadian accidental. I wish there was something I could do or say to make her pain go away. I can’t. The only thing I can do is speak up and fight back on her behalf.
To all Accidentals. We need your stories and more stories. If we can collect more stories like this one out open letter to Obama will become extremely powerful. Please help us by 1) sharing your stories with us 2) writing to your domestic politicians asking them to act and also help you connect with other Accidentals 3) contact the press in your home country and 4) spread the word. Our strength is in numbers and nationalities.
*****************
Dear President Obama,
I am Canadian, married to an Accidental American, but we only found this out this summer, and it has turned our world upside down.
My husband was born in xxx just because it was the closest hospital to the small border town his parents lived in, and medicare had not yet come to Canada, so the cost was the same here or across the border. He was taken home within a day of his birth, and lived his entire life up to now right in this same area. He grew up on a farm, and always dreamed of one day owning his own farm. We worked day and night to make that dream come true, went without to pay for the necessities, raised our children on our farm. Up until a few months ago, we were in the process of semi-retiring and our son taking over the farm, but now that seems impossible. We are faced with huge accounting fees, because there is so much work involved to comply when you own a business, and we will also face huge capital gains if we sell. All this just because of where he was born, it seems like we don’t have the right to live here in Canada. Our tax-free savings will be taxed, our investments will be taxed because they are “foreign” investments?? How are they foreign, we are Canadians!! Because we own a farm, we have over 2 million dollars in assets, so he can’t renounce without paying the exit tax. We are trapped, and for what? Because the US owns him? Because you need our money more than we do? We get nothing in return! I really don’t think you fully understand what this is doing to so many Accidentals who knew nothing about this until now. The amount of money you will get from us will make little difference to you, but will most likely bankrupt us and ruin our lives, lives we have struggled to make a success. You also know about the TPP and what that is doing to dairy farmers in Canada, because you are the county who wants to dump milk into Canada, so we are also losing there. Our future looks bleak. I have had to start taking anti-depressants and sleeping pills just to carry on. My husband is angry and moody, very hard to get along with. I fear that if this goes bad and he has to pay huge taxes, that I will lose him, he will kill himself before he will watch his farm fail and our son’s future be ruined. This is my biggest fear.
Another problem here is that it is impossible to know where to turn, we have accountants everywhere who don’t know a thing about doing this and they just scare people into dropping it and “taking the chance” that they won’t get caught. The first accountant we paid to talk to told us so many things we later found out to be false, like the spouse has to file, the children have to file, he will have to pay taxes on my income, so many other things that were not true. We paid 3 account firms before we settled down and hired one to do it. The work involved in this was astronomical! My entire summer was swallowed up between farm work and US tax work!!
So please, Mr. President, think long and hard about the people this is hurting. We are human beings trying to survive. You are a human being who holds in your hands the power to let us go, let us live our lives as we were before we learned of US citizenship taxation. Please, I beg of you, for thousands of Accidentals, give us our lives back, let us renounce without losing our businesses, our life savings, our hope for the future of our children and grandchildren. Do what you know is right, your proposal in the 2016 Green Book shows that you know about Accidentals and that is just isn’t right, please help us, let us go. We are not saying we want nothing to do with the US, that just isn’t the case, we respect the US for the most part, but knowing what citizenship taxation is doing to Accidentals and expats is disturbing to say the least.
Should these letters to President Obama not also be copied, as a minimum, to US Presidential candidate Bernie Sanders AND, ESPECIALLY, our new Prime Minister, Justin Trudeau?
Why can’t the US-tained land owner just transfer ownership to a non-US person, such as his Canadian wife, or son (if the son was not registered that is; he MAY register but does not have to because his mother is solely Canadian). In the UK we Yanks have been doing this awhile now. My wife owns our home. The IRS has no claim to it at all. We also do not have joint accounts. Of course if we get divorced one day, I am shafted.
@ Ran
A US spouse is allowed to transfer funds or property to their non-US partner but not in an unlimited way (as they would if their spouse was a US Citizen). The amount may have gone up recently but a couple years ago this annual transfer amount allowed was limited to $145,000. One can also make annual gifts of about $14,000 to anyone but these amounts do not add up very easily to the value of a home. If a couple starts with the non-US spouse holding the house, and separate financial accounts, this set-up MIGHT work. But, as you said, what if there is a divorce (or even a separation) – – YIKES. US Persons Cannot survive outside the US plantation………………
@Ran,
In Canada, if the non-US spouse is not employed, or doesn’t have sufficient income, the transfer could be axed *if there is a mortgage on the home.* The non-US spouse, as sole owner, would need to qualify for the mortgage on their own.
KIwi. Stop and think. The IRS won’t and can’t hunt you down and extradite you. They have bigger fish to fry.
How many times do we have to explain that they are stretched to the limit of their abilities?
Imagine. IRS person to his supervisor-” i think I’ll go after this guy Kiwi in New Zealand- he might owe us some money. Maybe we should spend $100,000 in lawyer fees to extradite him- that will fix him”
Supervisor- “you’re fired!’
LM, Ran is right. There is no Canadian law preventing the transfer of assets to a Canadian spouse. The IRS would of course view this as willful but the whole idea is to avoid contact with them in the first place.
Once the decision is made not to cooperate, the rest is relatively easy.
‘Imagine. IRS person to his supervisor-” i think I’ll go after this guy Kiwi in New Zealand- he might owe us some money. Maybe we should spend $100,000 in lawyer fees to extradite him- that will fix him”
Supervisor- “you’re fired!’’
Wanna bet?
IRS person to supervisor: “I think I’ll go after this guy in Japan because he doesn’t owe us any money but he claimed a refund of withholding that was stolen by IRS data entry clerk Monica Hernandez and IRS records no longer show his Form 1099. Maybe we should spend $100,000 in lawyer fees to collect penalties, prevent him from getting a refund, and make him spend a year’s salary trying to fight us even though courts will never give an honest guy a chance against us.”
Supervisor: “Go for it!”
Here’s the latest news.
Victim to court: “I move to compel the US to consult its own agency the IRS to find out if statements made up by the DOJ are true or not before the US files them in court. For example the IRS accepted a refiled return without forcing me to fabricate a social security number for my spouse, but the US persuaded Court of Appeals for the Federal Circuit to overturn the IRS’s acceptance and impose such a requirement. Fabrication of social security numbers used to be illegal and punishable before the Federal Circuit mandated it.”
Court: “Motion denied.”
@LM
In addition to the gifting you mentioned, it is possible to gift up to $5.43 million tax free in a lifetime using the unified gift and estate tax exclusion. This works for gifting to a NRA spouse. Unlike the above mentioned gifting, using this exclusion does require the filing of a gift form.
See: http://hodgen.com/gift-to-noncitizen-spouses-and-preparing-the-gift-tax-return/
@tdott,
yes, one can use ones US lifetime unified gift exclusion if one is leaving the plantation / turning in one’s citizenship. If one is taking this approach, to keep good records, I would suggest not only the IRS form RE gifting but having a local lawyer write up a “Deed of Gift” especially as this gift may be sizeable and you want a good record for your home country in case of future questions while alive or your estate.
“it is possible to gift up to $5.43 million tax free in a lifetime using the unified gift and estate tax exclusion”
Is there anything the other 99% of us can use?
(I’m not blaming you. You’re being informative about the law, and actually the law on this particular matter isn’t bad, but now yet again it makes homelanders think we’re all in the 1%.)
Normand Diamond We understand that you have a problem with the IRS and have a particular axe to grind. I for one don’t think this is the proper forum for it.
I suspect not too many homelanders read IBS.
At any rate, for those that do:
Getting over the $2 million net worth threshold isn’t too too terribly extraordinary if some of a number of circumstances come together:
– Lived in the same house in Toronto or Vancouver for several decades (ridiculous appreciation in value)
– Healthy pension built up (I think government workers can be particularly hit by this)
– Strong Canadian dollar
– Inheritance
Then there’s also being a small business owner, farm owner (which started this), lottery winner.
So although having a $2M net worth may put one in the top 1% (does it really?), that doesn’t necessarily mean a life of sipping pina coladas while munching on caviar on the beach of one’s private tropical island.
The following imagination is still wrong:
‘Imagine. IRS person to his supervisor-” i think I’ll go after this guy Kiwi in New Zealand- he might owe us some money. Maybe we should spend $100,000 in lawyer fees to extradite him- that will fix him”
Supervisor- “you’re fired!’’
The IRS does spend money to penalize innocent people. Don’t tell people they’ll be safe just because the IRS wouldn’t want to waste money chasing innocent people.
@Norman Diamond
Not wanting to fear monger, but I do believe you’re right. It takes virtually no effort for the IRS to send out a bunch of computer generated letters to people a countless number of times, that is until you reach the requisite number of times to land on a human being’s desk. That’s where the real fun begins. These guys are pit bulls. Best to stay off thier radar altogether, but who’s to know when FATCA’ll spit your name out?
Hunt down a minnow in New Zealand? Take their assets?, Extradite them? Please be serious.
I tend to agree they wouldn’t extradict because then they’d have to reveal their fabrications in court. But they can penalize and take assets without going to court. The 5th amendment died decades ago.
@Norman Diamond, wouldn’t the IRS still have to go through the foreign courts in such a situation? In a worst case scenario, I could see them reaching an out-of-court settlement. Otherwise, not worth their bang for Buck unless perhaps the expat were a whale. Especially if a minnow Expat had no assets located within the U.S. itself.
I could, however, still see the IRS sending out loads of warning letters abroad once they’ve sifted through the FATCA data.
“wouldn’t the IRS still have to go through the foreign courts in such a situation?”
In 2002 the IRS didn’t have to go through any courts to persuade TD Waterhouse in Canada from withholding 30% of Canadian sourced interest income in my account in Canada and paying that to the IRS. (That’s in addition to TD Waterhouse withholding 10% of the same Canadian sourced income and paying that to CRA, the correct amount of withholding since I live in Japan.)
On my 2002 return I declared the withholding and claimed a refund but the IRS didn’t pay it. In 2006 the IRS paid the refund for 2002, but I learned later that the IRS didn’t intend to pay that refund, it was a mistake, and they probably don’t have records of paying it.
I didn’t know it at the time, but in order to get a refund one has to sue the US in a US District Court or Court of Federal Claims, at least six months after filing the return. However, this makes the US the defendant. The US played whack-a-mole games, which I’ll get to in a minute.
The IRS alleged our return for 2002 was frivolous, but refused to say what was frivolous or how to fix it. The IRS alleged we owed a penalty. Until the IRS files a lien or proposes a levy, US Tax Court doesn’t have jurisdiction. When the IRS issues a notice of lien or proposed levy, the victim supposedly has 30 days to file a Request for Collection Due Process Hearing. After the IRS issues a Notice of Determination, the victim supposedly has 30 days to file a petition in US Tax Court. Of course the actual period is a lot shorter than 30 days, especially if the IRS mails a notice in December and it takes 28 days for the mail to arrive. Luckily they didn’t do it to me in December, and they put correct postage on those notices, so they only took about 8 days in the mail.
On returns from 2005 to 2008 the IRS resumed its allegations of frivolousness and still refused to say why. The IRS refused to refund withholding and assessed penalties.
The first lien to reach US Tax Court was for 2005 and 2006. In Tax Court the IRS is respondent. The IRS finally revealed some of its reasons for alleging frivolousness, but then played whack-a-mole games. Every time I proved I had relied on letters or published instructions or whatever, the IRS changed their alleged reasons. At the trial, when I tried to file evidence to prove that some of the IRS’s lies were lies, the IRS persuaded Tax Court to exclude my evidence as being irrelevant. Between calendar call and continuation the IRS withdrew its Settlement Officer’s declaration, signed under penalty of perjury, because I proved it was perjured, but Tax Court didn’t let me address that either.
When the IRS finally told me how to refile a return to make it non-frivolous, the IRS accepted the refiled returns.
In Court of Federal Claims, the US Department of Justice continued its whack-a-mole games. The US alleged other reasons to regard the returns as frivolous. The US persuaded Court of Federal Claims to overturn the IRS’s acceptance of the refiled return for 2005 but oddly upheld the IRS’s acceptances of returns for other years. Same in Court of Appeals for the Federal Circuit. The Federal Circuit eventually ruled that it was frivolous for me to fail to fabricate a social security number for my wife (the Social Security Administration still never granted nor rejected the application for one and the IRS had rejected ITIN applications up to that point). The Federal Circuit also gave other reasons to overturn the IRS’s acceptance of the refiled 2005 return, but oddly not for other years.
Eventually 2002, 2005 (again), 2006 (again), and 2007 reached Tax Court. Tax Court ruled that the IRS cannot collect the asserted penalty for 2002. That didn’t stop the IRS. Over a year later, the IRS partially collected for 2002 by seizing a refund owing for a different year. 2005 and 2006 repeated a settlement that I’ll get to in a minute, and 2007 was settled for penalties of $0.00.
“In a worst case scenario, I could see them reaching an out-of-court settlement.”
For 2005 and 2006, in the first Tax Court trial, the IRS proposed what is essentially an out-of-court settlement, because the IRS’s lawyer wrote it, I signed it, the IRS’s lawyer signed it, and the court delayed ruling. I complied. The IRS reneged. The IRS wrote a second settlement, which I rejected. The IRS’s lawyer wrote a third settlement, I signed, the IRS’s lawyer signed, I complied, the court entered that settlement instead of ruling by the court itself, and the IRS reneged.
The IRS can deprive the victim of property by persuading payers in any country to take withholding, the IRS can deprive the victim of property by keeping withholding instead of refunding it, the IRS can deprive the victim of property by seizing assets, all without going to court in any country. The victim is the one who has to go to court.
“Otherwise, not worth their bang for Buck unless perhaps the expat were a whale.”
Sure it is. The IRS’s lawyers and DOJ’s lawyers make big fat salaries, a nice big bang for the buck. US taxpayers lose by paying those salaries, but so what, the liars aren’t paying, the liars profit. Have you read news about IRS employees getting bonuses even when they were caught doing bad jobs? Have you read about the IRS rehiring employees who had been fired for committing crimes? They get nice bangs for the buck.
“Especially if a minnow Expat had no assets located within the U.S. itself.”
Right, in that case all they can do is use “persuasion” to get withholding from a financial instutution in another country, such as “we won’t steal 30% of US assets of the financial institution and affiliates, if the financial institution steals from the victim for us”.
Eventually I figured out that the years for which the IRS alleged frivolousness were years that had a Form 1099 instead of T5. Eventually the Treasury Inspector General for Tax Administration reported to Congress that IRS data entry clerk Monica Hernandez was stealing from Forms 1099 by attributing withholding to herself instead of victims. So when IRS employees altered IRS records of my returns to fabricate claims of large foreign tax credits which had no basis, that alteration also was intentional, and that was the actual basis that the IRS originally had for accusing me of fraud and frivolousness. But courts don’t care, they see that I had failed to commit perjury on original returns before the IRS instructed me to do so, I had failed to fabricate a social security number for my wife, so I was frivolous and my withholding should remain embezzled.
The IRS doesn’t have to go to court to do any of this. I only wasted nearly a year’s salary by trying useless fights. I only had both heart valves damaged by stress, requiring surgery. Monica Hernandez was arrested but her cohorts still have the blessings of the courts.
This is sobering stuff. My heart goes out to you and how you have been treated from the outset as a major tax criminal. It seems so senseless on the part of the IRS. The only solution is to renounce which is what we are desperate to do. I want I life that is not dominated by FATCA.
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No matter what maneuvers you may be able to employ ( gift exclusions etc), as offered by some posters, the plain matter of fact is this.
Let’s just keep it simple. None of this would be happening without CBT. None of this would be happening to Canadians ( or citizens of other countries) without our own governments complying with the demands of the USA.
Please continue to donate to our law suit because, unfortunately that’s what is takes to right wrongs. We did our best with the Harper government to get that message to them and they ignored it and escalated our costs so that they could say that the law is the law as dictated by the USA. Now is the time to remind and expect the Liberal government to reverse this injustice. The ball is in their court. That’s one reality; the other is we have legal bills to be paid to ensure we remain on the Liberal litigation agenda to right this wrong they have inherited.
We all knew at the start this litigation was going to be expensive. And yes, our first litigation step did not result in a judge at first instance who agreed with us. We anticipated that might be the case, because as John Richardson reminds us, this is not a sprint. I know many of you share the same idea and expectations this will not be settled until we reach the Supreme Court of Canada.
In the meantime,and particularly now we need to assure the current government that we are still very serious about upholding our rights. And we will persevere. They can see our fundraising thermometer on the front page as easily as we can. It needs replenishing. Normally in litigation, neither side can see so transparently what funds the other side has available.
While we may look quite vulnerable in that respect right now, and while we all dislike the fact that our fundraising is very grass root oriented with no deep pocket donors, that is something we can also take pride in. We have pointed out to politicians many times that FATCA affects the ordinary citizens in so many harmful ways. Currently that is who our donor base is. We are sending a very strong message to our government about who we are. Let’s keep the message alive.
As aways, thanks from Gwen and me for your assistance, financially and otherwise.
Thanks for your beautiful message to us, Ginny. You paint a clear picture of the importance of carrying on to uphold your and Gwen’s right to be rid of the CBT consequences of non-meaningful US citizenship without consent. Thank you so much for bravely standing out in front of all of the rest of us, giving up so much of your own privacy to act on behalf of my family and so many affected others in Canada and around the world.
May this message be kept alive by our and others’ donations and heard by reasonable Canadian government representatives who put people before *foreign financial institutions* and really mean it when their Leader and our new Prime Minister says *A Canadian is a Canadian is a Canadian*. How those words will strengthen this country and all of its people if they ring true.
From Canada’s New Justce Minister, Jody Wilson-Raybould, who believes in Canada’s Charter of Rights and Freedoms.
Speaking of our local CANADIAN and other-country *foreign financial institutions*…
Wealth Management.com, November 9, 2015 – deVere Group CEO Slams FATCA, “Fiscal Imperialism”
This is where the rubber meets the road, folks.